Analysis | What’s really driving Evergrande’s ever-surging share price?
Analysis: Chairman Hui Ka-yan holds 77.79pc of its stock, but who’s after the rest, and what’s the company’s genuine worth?
China’s most indebted property developer has given its bearish investors a strong slap in the face.
The surge can be attributed to multiple factors, but chairman Hui Ka-yan’s ambition to defeat short-sellers, tapping his Hong Kong tycoon friends to pave the way for its planned listing on the mainland, is undoubtedly the key driver behind the dramatic rises.
On Monday, the developer’s shares shot up an astonishing 23 per cent, even after rallying the previous eight consecutive trading days.
By the close of play on May 29, its market value had reached almost HK$200 billion (US$25.66 billion), trading at a record 36 times historical earnings to become the most expensive property stock on the Hong Kong market.
[Evergrande chairman] Hui and some of his friends are just trying to fry up the share price, and push for a better valuation before an IPO
“Hui and some of his friends are just trying to fry up the share price, and push for a better valuation before an IPO,” said Philip Tse, property analyst at Bocom International.